BRUSSELS ― The threat of internal revolt in the European Commission has pushed its president to back down and promise more money to poor regions than previously intended when she presents her plan for the EU’s seven-year budget on Wednesday.
According to a document seen by POLITICO, Ursula von der Leyen has delivered a series of last-minute concessions in an effort to placate two of her team at opposite ends of the political spectrum ― Italy’s right-wing Raffaele Fitto and Romanian socialist Roxana Mînzatu.
Von der Leyen’s about-turn is a signal of the delicate tightrope she must walk to keep the competing voices of her Commission onside, while also delivering a spending plan that will work for the increasingly unruly European Parliament and 27 national governments, all of which must approve the budget before the end of 2027. The move ― which would see the Commission continue to dole out a big portion of its funding to poorer areas of Europe from 2028 ― is seen as being just enough to secure the political support of the EU’s 27 commissioners, two EU officials told POLITICO.
“The regional dimension is not completely lost” from the draft budget, said an EU official who, like others quoted in this article, was granted anonymity to speak freely.
Von der Leyen’s decision is a climbdown from her initial plan to significantly increase the power of central governments in managing the EU’s regional funds that are currently worth €400 billion and make up one-third of the bloc’s total spending.
The idea was that empowering national capitals would act as an incentive to complete reforms and reduce red tape. However, critics said that it would have just reinforced existing disparities within individual countries, sidelining regions from the process.
Lingering suspicions
The whole issue is something of a hot-button topic for the EU. Boosting individual regions within countries has played a key role ever since the so-called cohesion policy was introduced in the 1970s to narrow the gap between poorer and richer areas in Europe.
Critics welcomed von der Leyen’s concessions, but they have lingering suspicions that this is little more than politics.
“They are making only minimal concessions, but their initial ideas were so unpopular that they had to give in,” said Siegfried Mureșan, the Parliament’s budget negotiator for von der Leyen’s own center-right European People’s Party.
The latest move came after von der Leyen met commissioners and top officials over the weekend.
The Commission pledges “to reduce regional imbalances in the union and the backwardness of the less-favored regions and promoting European territorial cooperation,” according to the internal document.
Those concessions, however, are unlikely to be enough to quell criticism from lawmakers and several governments.
Supporters of cohesion policy are calling on von der Leyen to preserve a set of criteria ― known as the Berlin formula ― that allocates a major share of the cash to underdeveloped regions across the bloc.
The document, which may still be revised before Wednesday’s unveiling, says that poorer countries ― measured by total population, national wealth per head, rural poverty, and regional output per person ― will still receive the bulk of the money.
But critics point out that central governments will have more say than before over how much of that funding should trickle down to regions.
“We have not yet seen any other sound credible alternative to the Berlin formula,” said Mureșan. “And we also know that attempts to change it in the past have failed.”
In a further late-hour concession, the Commission kept alive the European Social Fund (ESF) ― which caters for the training of young people and the unemployed― and other programs that were believed to have disappeared from the budget.
This was a key demand from Mînzatu and the left-leaning Socialist and Democrats, who linked their support to von der Leyen in last week’s no-confidence vote to the preservation of the ESF.
But the Commission’s draft proposal did not attach a specific sum to the ESF, prompting a second EU official to say that the “Socialists didn’t get a lot out of” supporting von der Leyen.
Slippery slope
Separately, Germany criticized the Commission for offering cheap loans to countries that spend more than what is set out in their spending plans.
The German government fears that this could become a slippery slope to introducing a permanent mechanism of EU-wide debt that they have traditionally opposed.
“We support the Commission’s reform course and are pleased with the bold proposals,” a German official said. “However, debt instruments in the EU can only be an absolutely exceptional instrument in an acute crisis. A permanent debt instrument for general expenditure would be a red line for us.”
Berlin, however, is not alone in harboring these fears.
“The solution cannot be to borrow more money on a permanent basis to top up the national plans, “said an EU diplomat. “That’s plugging one hole with the next. This only leads to higher debts and even less fiscal space.”
Hans von der Burchard contributed to this article from Berlin.
The post Von der Leyen to dilute budget plan to stave off Commission rebellion appeared first on Politico.
